Not a fare at any cost

This piece is really about public policy; about what works and what doesn’t, although Chennai auto-rickshaw drivers figure prominently in it. But I am getting a little ahead of the story.

The hero is a taxi driver, full of ideals and high principles. In the best traditions of romantic fiction, a rich girl falls in love with him. They meet and decide, in the language of management literature, ‘to grow their love’. Their path, as is often the case, is strewn with obstacles.

The hero’s exacting standards on ethical behaviour are such as to rule out the option of running off to the nearest temple and exchanging garlands in the presence of the temple priest. How he overcomes the odds to marry the girl who is closest to his heart forms the crux of a novel, serialised in a popular Tamil magazine that I recall reading from my school days.

There is a particular episode that is vivid even to this day. The hero is cruising down the road in his taxi, in search of a fresh custom after dropping off a passenger. He spots his lover waiting at a bus stop. He stops the cab and, quite naturally, steps out for a chat. I don’t recall the exact dialogue. There was clearly some argument with the heroine wanting him to do something and our hero baulking at the idea, saying that it wouldn’t be the right thing to do.

Engaged!

As if to reinforce the point, he asks her somewhat rhetorically whether she realises that even as they were talking, he has flagged down the taxi meter. But, of course, she hadn’t.

In any case, cars in the 60s hadn’t evolved into the sleek specimens they are today, where no advertising campaign is complete without the suggestion to prospective car buyers that the model in question ought to remind them of the latest ‘Miss Universe’.

The hero goes on to elaborate that once he is out on the road, he must be available to any member of the public wishing to engage his taxi for a trip. Hence, he has flagged down the meter to indicate that he is engaged for the moment.

Lack of practice

As for the average Chennai auto-rickshaw driver, however principled he may be about most things in life, flagging down a fare meter is not something that you can credit him with. Yes, you could also expect him to stop the vehicle and run to his girlfriend’s side the moment he spots her on the road. Mind you, the flame of love burns in his heart with just the same incandescence as it did in Romeo’s, while serenading Juliet in that balcony scene from Shakespeare. I doubt very much if the auto driver would flag the meter down while engaged in a conversation. The omission, I suspect, has as much to do with years of neglect and sheer lack of practice in the art (flagging down a meter) as with the intensity of his ardour for his lady love.

Which is why I think auto drivers in the city going on a protest march demanding a fare revision, as they did the other day, or the efforts by the Tamil Nadu Government to come up with revised fares before the Supreme Court deadline on the issue, are a complete waste of time. If past experience is anything to go by, what would happen is this: Fares would be revised. The general public would be unhappy at the huge hike. The drivers would be equally unhappy as it would still not be adequate enough from their perspective. So they would go back to plying their vehicles on fares that are negotiated with passengers and it is back to square one until some newspaper decides that this where they score big against the competition and takes up the issue. .

Solution at a cost

A far more elegant solution to put an end, once and for all, to all those anguished wailings of passengers, auto-rickshaw drivers, the bleeding hearts among trade unions and the like, is to set the minimum fare and the fare for incremental unit of distance travelled so high that there would be no need for any revision at all, thereafter. Why not fix the minimum fare at, say, Rs 100?

How about reducing the minimum distance for which such a fare would be applicable to a mere kilometre? Let every additional kilometre of distance travelled be charged at Rs 50 or even Rs 75.

You can be sure that there would no more be this talk of the Government not having revised the fare for so many years. Indeed, such a fare structure could be expected to last well into the distant future unless the Arabs or Goldman Sachs decide to do something about crude prices.

What are the advantages of such a policy framework? The Government would no longer be accused of callously neglecting the plight of auto drivers unable to eke out a decent livelihood from their trade. Nor can it be accused of remaining a mute spectator to hapless passengers being fleeced. So the Government is distinctly better off. The drivers too would be happier as the revised fares would be substantially higher than what was legally applicable, till then.

A win-win for all

For the general public, the fares would be so ridiculously high that there would simply be no question of them engaging an auto-rickshaw on such terms. So they would refuse to get into one. At which point, the drivers would have to come down from the statutorily fixed higher fares and settle for something lower that is mutually acceptable to both. Thus, the public are no worse off under the new regime.

Of course, you could turn around and claim that setting an exorbitantly high fare structure would lower the image of the Government in the public esteem. It is difficult to see how its image would suffer any further when it is already dented by successive governments’ failure to enforce their laws on regulated fares for auto travel.

Looked at any which way, the act of setting an exorbitantly high fare for auto-rickshaw travel is a public policy choice that leaves no one worse off than they were earlier. Additionally, it has the advantage of staving off the need for the Government to come out with fresh policy choices in future. Considering that governments more often than not make bad choices, postponing the need to make public policy choices is a positive welfare outcome.

The situation, as economists would say, is ‘Pareto Optimal’. Of course, the auto-rickshaw economy can be made to operate at a higher level of output which leaves both consumers and auto drivers better off. But that would require a different set of conditions to prevail in that economy. And that is an entirely different matter altogether.

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